Reduction of Worst Case Housing Needs by Assisted Housing

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This report seeks to answer the question, when units of assisted housing are added to a market, is there a commensurate reduction in the number of households with Worst Case Needs (WCN), defined as unassisted renter households with very low-income (VLI) who pay more than 50 percent of income on housing or live in severely inadequate conditions or both?

Findings

Simple bivariate models were constructed comparing WCN as a percent of VLI renters to assisted housing as a percent of VLI renters.

Prior work examined metropolitan areas in the 1990s and found a reduction in WCN of 76 households for each 100 additional assisted units in the market.

This work was replicated with more recent data and finds a reduction in WCN of 68 households per 100 units of assistance.

The study of metropolitan areas was expanded to build models predicting the reduction in WCN controlling for many of the supply and demand conditions that influence the incidence of WCN.

The estimated reduction in WCN rose to 87 households per 100 incremental assisted units with an Ordinary Least Squares model.

The estimate reduction rose still further to 94 households with a Weighted Least Squares model with weights based upon the size of the rental population.

Sensitivity tests were made to see if the estimated reduction varied as a function of income levels and prices within the metropolitan areas.

Metropolitan areas with above national average income levels show evidence of greater reduction in WCN.

Metropolitan areas with above national average rent levels show similar evidence of greater reduction in WCN.

Because about 85 percent of assisted households are drawn from the VLI population, it seems likely that among the available estimates made of the reduction in WCN per 100 incremental assisted units, the best estimates are in close proximity to this figure, in the range of 80 to 90 households per 100 new assisted housing units.